Information Transparency in B2B Auction Markets: The Role of Winner Identity Disclosure

Abstract

We study the impact of information transparency in B2B auctions. Specifically, we measure the effect of concealing winners’ identities on auction outcomes using a large-scale, quasi-natural field experiment. Contrary to the conventional wisdom that “the more information, the better,” we find that concealing winners’ identities leads to a significant increase in price by approximately 6%, and such effect holds true across both online and offline channels as well as different types of bidders. We further explore the mechanism that drives the observed effect. The empirical analysis suggests that the price increase may primarily stem from the disruption of imitative bidding which relies on the identification of fellow competitors. Our findings have important implications for the design of auction markets, especially multi-channel B2B markets.

Keywords: Auction design, field experiment, information transparency, identity disclosure, sequential auctions